OECD: many advanced countries' political financing needs tighter regulation, enforcement

Many economically advanced countries need tighter regulation and enforcement on political finance, according to a new report published Thursday by the Organization for Economic and Cooperation Development (OECD).

Failing to fully enforce regulations on political party funding and campaign donations, and leaving loopholes that can be exploited by powerful private interest groups were listed as examples.

"Policy making should not be for sale to the highest bidder," said OECD secretary-general Jose Angel Gurria, when launching the organization's first report on political financing at a meeting of the OECD Global Parliamentary Network, a forum for legislators from member and partner countries to compare policies and discuss best practices.

The OECD report said private donors frequently use loans, membership fees, and third-party funding to circumvent spending limits or conceal donations.

Tightening regulation and applying sanctions more rigorously would help to restore public trust at a time when voters in advanced economies are showing disillusionment with political parties and fear that democratic processes can be captured by private interest groups.

OECD's study shows that many advanced countries struggle to define and regulate "third-party" campaigning by organizations or individuals who are not political parties or candidates, enabling election spending to be channelled through supposedly independent committees and interest groups.

Only a handful of countries have regulations on third-party campaigning, and these regulations vary in strictness.

OECD said globalization was also complicating the regulation of political party funding as multinational companies and wealthy foreign individuals are increasingly integrated with domestic business interests.

Where limits and bans on foreign and corporate funding exist, disclosure of donor identity is a vital deterrent to misuse of influence. While 17 of the 34 OECD countries ban anonymous donations to political parties, 13 only ban them above certain thresholds and four allow them.

According to the international think tank, even when donations are not anonymous, countries have differing rules about disclosing donor identity. In nine OECD countries, political parties are obliged to publically disclose the identity of donors, while in the other 25 OECD countries parties do so on an ad-hoc basis.

Only 16 OECD countries have campaign spending limits for both parties and candidates. While such limits can prevent a spending race, challengers who generally need more funds to unseat an incumbent may be at a disadvantage in the other 18 countries.

Finally, a lack of independence or legal authority among some oversight institutions leaves big donors able to receive favors such as tax breaks, state subsidies, preferential access to public loans and procurement contracts, OECD said.

OECD made several suggestions in its report such as, advanced countries should design sanctions against breaches of political finance regulations that are both proportionate and dissuasive, they should strike a balance between public and private political finance, and they should focus on enforcing existing regulations, not adding new ones. Endit